Film Review: Blue Jasmine - Cate Blanchett delivers astounding performance as fallen Park Avenue princess

A miracle of a movie, given Woody Allen's recent film-making history

To call Woody Allen's new film a "return to form" would be misleading, since his film-making in the past 20 years has been so erratic that it's hard to know what his "form" might be anymore. I'm inclined to think of Blue Jasmine instead as a small miracle, an autumnal drama as exquisite as it is unexpected. At times you have to wonder how Allen, in his late seventies and a seeming decline, actually made it; by the end, it's clear that nobody else could have made it.

In its basic situation can be heard the distant clang of A Streetcar Named Desire, though it's neither pastiche nor reprise, just a quietly respectful tribute. Cate Blanchett takes on – magnificently inhabits – the role of Jasmine, a Park Avenue princess who's hit the skids. We first meet her on a plane, jawing away to a fellow passenger (anyone will do), then arriving in sweaty turmoil at the cramped apartment of her sister Ginger (Sally Hawkins) in San Francisco, her home for the next few weeks. Ginger wonders how Jasmine, broke, can afford to fly first-class and tote Vuitton luggage, though she's too kindly and accommodating to make a fuss. Jasmine, gargling vodka martinis and popping Xanax like M&Ms, would appear to be a woman on the verge of a nervous breakdown – or is she already over the verge and plummeting? That she keeps muttering to herself on the street isn't a good sign.

Allen unpeels the truth by flashing back to her former life, a gilded routine of shopping, charity events and weekends in the Hamptons. Her husband, a Manhattan plutocrat, is played with slippery suavity by Alec Baldwin. He's called Hal, though from what we can gather of his business dealings he may as well have "Bernie Madoff" monogrammed on his polo shirts. Jasmine also suspects him of cheating on her, but as with his finances she sees the advantage of turning a blind eye. That's the vital theme of the film: how far self-delusion can take you before that self starts to disintegrate. The sudden transplant from East coast to West also involves a downward lurch in class. Haughty and entitled, Jasmine sniffs at Ginger's car-mechanic boyfriend Chili (Bobby Cannavale, a Kowalski minus the sexual menace) and disdains the attempts to matchmake her with one of his uncouth pals. It's like watching Katharine Hepburn being chatted up by Lou Costello. As for the amorous dentist (Michael Stuhlbarg) who makes a play for her, well, pulling her own teeth would be preferable.

Where other film-makers (the Coens, for instance) would have mined Jasmine's disgrace for sardonic comedy, Allen sees as much poignancy in her comedown. And he couldn't have chosen a better actor than Cate Blanchett to embody it. With every twitch, every startled glance and impatient gesture, Blanchett finds the human within this monster of snobbishness. With her persuasive cheekbones and bruised tiger eyes, she recalls a phrase Pauline Kael once used to describe Dominique Sanda – "a depraved Valkyrie". There are hints in her mental fragility of Blanche Dubois, a part Blanchett has played on Broadway – the clue is (almost) in her name. And in the rueful stripping away of status you may even be reminded of the fallen socialite of Dylan's "Like a Rolling Stone". (Allen, who would never willingly reference any music later than the 1940s, here harps on "Blue Moon", Jasmine's nostalgic touchstone.)

At times her performance feels almost too painful for the scale of the movie, as though she were channelling Ibsen (or Tennessee Williams) while everyone around her is playing light comedy. Almost. What interrupts the sorrow is a humorous touch of self-awareness, never openly expressed, but perceptible in a sidelong look or a lowering of her voice. If it's fair to say Blanchett carries the movie, that's not to undervalue the superb ensemble playing. Hawkins, as the humble, put-upon sister (she and Jasmine were adopted), is fresh and alive, and her two blobby adolescent sons are a splendid Dickensian cartoon of absurdity. Peter Sarsgaard is smoothly reptilian as an ambitious congressman who falls for Jasmine, proving that romantic delusion isn't the exclusive province of women. Best, and most surprising, is Andrew Dice Clay as Ginger's ex-husband, a blue-collar guy with a grudge against Jasmine. I'd heard of Clay as a stand-up from the 1990s, but it seems he can also act. His late encounter with Jasmine is one of several small scenes he does beautifully, a miniature of tenderly spoken resentment.

How should we respond to this story of a spoilt woman's comeuppance? It's impossible not to feel for her. Jasmine, knowingly or not, colluded in the ruin of many, but she has ended up broke, homeless, barely sane. The pathos of her downfall is registered in nuances of observation, like the cream Chanel jacket she wears too often, clinging to the facade of her former prosperity. That facade, so dearly bought, will be the last thing to go. Allen has written brilliant parts for women in the past – for Diane Keaton in Annie Hall and Manhattan, Mia Farrow in Broadway Danny Rose, Judy Davis in Husbands and Wives. But writing a part and casting it are two different skills. Here, he may have made the smartest choice of his career: Cate Blanchett's performance really is that good.

If I have bestowed an extra, perhaps unwarranted star on the film it's because of her – and also because this is my last column for the newspaper. It's nearly 15 years since I wrote my first, in which time I've watched more movies than is probably good for me, or for anyone. Some of them I loved. Thanks for reading; it's been a privilege to advise you. And may I wish you many more ripping times in the dark.

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Cate Blanchett, Alec Baldwin, Andrew Dice Clay and Sally Hawkins in a scene from "Blue Jasmine"